The timeframes for processing telecommunications concessions exceed legal norms by nearly 120%, and conflicts within the sector’s institutional framework exist


  • Lengthy processing periods for obtaining and modifying concessions, repeated non-compliance with regulations, a divergent authorization regime, and limited availability of specific areas for installing facilities are part of the scenario facing the deployment of telecommunications infrastructure in Chile.
  • Regarding the challenges posed by the sector’s institutional structure, there is a need to address the tension within the Undersecretariat of Telecommunications (SUBTEL) due to its dual (often conflicting) functions: While it promotes the industry, it also has to regulate it. Additionally, there’s a reactive form of oversight and high variability in the imposition of fines.
  • The National Commission for Evaluation and Productivity (CNEP) will present an advance of the study “Productivity in the Telecommunications Sector,” which will be introduced in Congress on March 23, discussing the bill to recognize internet access as a public service.

Monday, August 21, 2023. The telecommunications sector in Chile currently faces various productivity challenges. The CNEP has released preliminary findings from the research mandated by the Chilean government in 2022, titled “Productivity in the Telecommunications Sector.” In addition to identifying barriers hindering its growth, the study will soon provide policy recommendations to enhance its performance.

Findings relate to deficiencies in infrastructure deployment and the sector’s institutional structure. Granting and modifying public and intermediate telecommunications service concessions (including those solely providing physical infrastructure) demonstrate lengthy processing times. While regulations set a 6-month deadline for both actions, the average time between 2012 and 2021 for granting a concession was 400 days. For modifications, it was 263 days, an average of 220 and 83 days, exceeding the norm by 122% and 46%, respectively.

The CNEP notes that this situation arises, among other factors, due to the divergent authorization regime for telecommunications services. Indeed, an entity seeking services must separately apply for authorization for each type of service (e.g., voice calls and data transmission), making it difficult to adapt to new technologies quickly.

Convergence refers to “the ability of different network platforms to carry essentially similar types of services, or the convergence of consumer devices such as the telephone, television, and personal computer” (European Commission 1997). The CNEP found that, although SUBTEL has raised this issue on various occasions and the industry has introduced new services to some extent through specific interpretations, the current regime continues to operate in silos.

Chile has strategically regulated certain telecommunications services so license holders can transmit two or more signals. For example, mobile and landline telephone service holders, among others, have been authorized to share voice, data, images, video, and internet access services. Regarding the specific internet access service, SUBTEL has stipulated that any operator can provide the service without needing to apply for a license. However, such measures may either be discriminatory (not providing equal regulatory treatment to all telecommunications services) or may not efficiently address the regulatory challenges caused by divergence.

Despite special rules facilitating telecommunications infrastructure installation on certain public lands, findings show that antenna support towers and radiating systems tend to be on private grounds. Since 2012, when the Diario Oficial published the Antenna Law, 88% of Installation Permits for Antenna Support Towers and Radiating Transmission Systems (PITSA) over 12 meters were granted for placement on private lands, while only 2% for lands belonging to decentralized public entities.

The Antenna Law mandates municipalities to determine zones where interested parties would preferably have the right to use to place support towers taller than 12 meters. However, after ten years, very few municipalities have fulfilled this mandate. For example, only eight municipalities have issued the respective ordinance in the Metropolitan Region.

The investigation also warns that there is no centralized information (whether through the Ministry of Housing and Urban Development – MINVU – or SUBTEL) about the PITSA (Installation Permits for Antenna Support Towers and Radiating Transmission Systems) that Municipal Works Departments (DOM) must provide. The data is only found in each DOM and, in most cases, in non-digitized form.

To understand and identify the problems associated with the mentioned permits, CNEP collected qualitative and quantitative evidence showing lengthy processing times in the granting process. The average processing time for PITSA granted between 2012 and 2021 was 154 days, exceeding the timeframes for permits for more complex projects awarded by the Municipal Works Department, such as construction, which averages 127 days (CNEP, 2019). Several sector-specific procedures and authorizations must be obtained before installing a support tower, which is a considerable difference.

One of the leading causes of these extended timeframes is citizen opposition to this type of infrastructure due to the fear of prolonged exposure to electromagnetic waves.

Notably, the Antenna Law established that the Ministry of the Environment (MMA) was responsible for setting environmental quality or emission standards for electromagnetic waves generated by telecommunications equipment and transmitter networks. However, these standards have not been issued for over ten years since the Antenna Law publication 2012. Currently, emissions are regulated by Exempt Resolution 3.103, issued by SUBTEL in June 2012.

The draft standard for electromagnetic radiation emission is being developed, which would restrict current emission limits by 90% in urban areas and 42% in sensitive areas. While a General Analysis of Economic and Social Impact (AGIES) was conducted, the study notes that this may need to evaluate the regulatory impact of a new standard comprehensively. The cost-benefit analysis – which the AGIES performs – is just one of the stages required for a comprehensive assessment. Considering this, a more thorough analysis, such as a Regulatory Impact Analysis, is proposed.

Challenges for Institutional Framework

Another topic CNEP addresses concerns the institutional framework accompanying the sector and what aspects should be considered to improve its productivity.

The document warns of conflicts and tensions within the roles played by SUBTEL since, alongside its role in promoting the sector (policy design and development), it authorizes and supervises projects emphasizing compliance with regulations.

An example illustrating the ongoing conflict the sector authority faces relates to the 5G auction. In August 2020, SUBTEL called for granting telecommunications service concessions to operate on high-speed wireless networks (3.5 GHz). Subsequently, it provisionally authorized the modification of concessions that a holder had in the same frequency band of the auction so that they could also provide such telecommunications services. However, one of the auction winners opposed this because SUBTEL had granted concessions to the holder of this fourth network for a different type of service. In summary, it’s essential to separate the roles of promotion and control to prevent the latter from being influenced by the short-term objectives or considerations of the former.

Additionally, the analysis notes that, generally, the supervision conducted by SUBTEL is reactive, meaning complaints, claims, or requests trigger it. By August 2018, over 80% of supervision actions were based on reactive situations.

As highlighted by the OECD, inspection strategies based on reactive inspections are less effective compared to those focusing on preventive actions.

In 2021, out of 283 technical reports on supervision actions associated with the Analysis and Planning Department, 22% were reactive, and out of 1,765 supervision actions related to the Operations Department, 51% were reactive (excluding work receptions). This mainly occurs because there is a gap between the information reported by companies and the SUBTEL network monitoring. It’s worth mentioning that there needs to be an integrated and timely alarm detection system.

To address this situation, the bill to recognize internet access as a public service seeks to add that “concessionaires of public telecommunications services must enable web access, with a user profile for reading and exporting, that allows the Undersecretariat access to the information contained in their control and real-time network monitoring centers. Similarly, concessionaires must provide the necessary quality of service data, alarm detection, and network fault resolution data to exercise the Undersecretariat’s functions and competencies, in close to real-time (…).”

Finally, the CNEP identified that between 2018 and 2022, there was a high variation in the application of fines imposed by the Ministry of Transport and Telecommunications (MTT). In effect, the value of a penalty for the same category of violation could exceed its average value by more than three times. One of the causes explaining this situation is that Law 18.168, the General Telecommunications Law, does not provide guidelines for the MTT to establish when a violation is more or less severe, differing from what occurs in other regulated sectors.